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Page 1 © King Abdullah Economic City 2015 © King Abdullah Economic City 2015 EEC - Investor Relations Presentation December 31, 2015
Page 1 © King Abdullah Economic City 2015
© King Abdullah Economic City 2015
EEC - Investor Relations Presentation December 31, 2015
DISCLAIMER
This presentation (Presentation) has been prepared by Emaar the Economic City (EEC) and/or its subsidiaries based on information available to it
internally and third party sources. This Presentation does not purport to contain all the information that a prospective investor may require in
connection with any potential investment in EEC. You should not treat the contents of this Presentation, or any information provided in
connection with it, as financial advice, financial product advice or advice relating to legal, taxation or investment matters. No representation or
warranty is made by EEC or any of its advisers, agents or employees as to the accuracy, completeness or reasonableness of the information in this
Presentation or provided in connection with it. No information, including but not limited to numbers, maps, drawings, or maps contained in this
Presentation or any other written or oral communication in connection with it is, or shall be relied upon as, a promise or representation and no
representation or warranty is made as to the accuracy or attainability of any estimates, forecasts or projections set out in this Presentation. No
liability will attach to EEC, with respect to any such information, estimates, forecasts or projections. EEC does not accept responsibility or liability
for any loss or damage suffered or incurred by you or any other person or entity however caused (including, without limitation, negligence)
relating in any way to this Presentation including, without limitation, the information contained in or provided in connection with it, any errors or
omissions from it however caused (including without limitation, where caused by third parties), lack of accuracy, completeness, currency or
reliability or you, or any other person or entity, placing any reliance on this Presentation, its accuracy, completeness, currency or reliability. EEC
does not accept any responsibility to inform you of any matter arising or coming to EEC’s notice after the date of this Presentation which may
affect any matter referred to in this Presentation. Any liability of EEC, their advisers, agents and employees to you or to any other person or
entity arising out of this Presentation including pursuant to any applicable Saudi law is, to the maximum extent permitted by law, expressly
disclaimed and excluded.
The distribution of this Presentation is governed by the Expression of Interest and Confidentiality Agreement as well as by law in certain
jurisdictions. Recipients and any other persons who come into possession of this Presentation must inform themselves about, and observe any such
restrictions.
Future matters:
This Presentation contains reference to certain intentions, expectations, future plans, strategy and prospects of EEC. Those intentions,
expectations, future plans, strategy and prospects may or may not be achieved. They are based on certain assumptions, which may not be met or
on which views may differ and may be affected by known and unknown risks. The performance and operations of EEC may be influenced by a
number of factors, many of which are outside the control of EEC. No representation or warranty, express or implied, is made by EEC, or any of its
directors, officers, employees, advisers or agents that any intentions, expectations or plans will be achieved either totally or partially or that any
particular rate of return will be achieved. Given the risks and uncertainties that may cause EEC’s actual future results, performance or
achievements to be materially different from those expected, planned or intended, Recipients should not place undue reliance on these
intentions, expectations, future plans, strategy and prospects. EEC does not warrant or represent that the actual results, performance or
achievements will be as expected, planned or intended.
2
Page 2 © King Abdullah Economic City 2015
CONTENTS
• Introduction
• Project Overview and EEC Highlights
• EEC Financials
• Residential Development
• Industrial Valley
• Commercial Development
• EEC Company History
OUR VISION To establish King Abdullah Economic City (KAEC) as a great
enabler of socio-economic development in the Kingdom of
Saudi Arabia.
Mecca
Madinah
KAEC MASTER PLAN
© King Abdullah Economic City 2015
Land Use % Breakdown Land Use Current Plan Industrial 23,625,000
Commercial/Hospitality 12,736,000
Residential 75,373,000
Other 19,847,000
BUA Total 131,581,000
Employment 890,000
Population 1,750,000
Industrial 21%
Retail 11%
Residential 68%
KAEC is a greenfield city development roughly the size of Washington DC. Its objective is to help with Saudi Arabia’s Acute housing demand and support economic diversification. KAEC’s Strategic location on the Red Sea puts it close to international maritime routes and provides instant access to key cities within Saudi Arabia. KAEC is comprised of the Coastal Communities, The Industrial Valley, KAP, and The Hejaz District.
Project Overview
KAP
Industrial Valley
Coastal Communities
Hejaz District
KAEC BUSINESS MODEL
Return to Share-
holders Fin. benefits
to Govt.
Realization of
Economic city vision
Job Creation
Local & Foreign Inv.
Logistics Hub
Funding Sources
Land/Unit
Sales
Shareholders
Equity
Debt
Economic Impact
COMMERCIAL &
LIESURE
• Retail
• Offices
• Hospitality
CITY DEVELOPMENT &
ECONOMIC GROWTH
• Jobs Creation
• Population
• Ramp-up
CITY DRIVERS • Port
• Industrial Valley
• Haramain Station
• Bonded Zone
• Land Bridge
• Babson College
INFRA-STRUCTURE
• Roads Network
• Utilities
• Public Assets
SOCIAL
AMENITIES
• Education
• Healthcare
• City Management
HOUSING NEEDS
• High End
• Middle End
• Low End
© King Abdullah Economic City 2015
KAP Current Capacity
2.7M TEU
24M SQM sold out of a total of 131M SQM and 364,000 SQM this year
ECA is the sole
regulator of the Economic Cities and for KAEC
12.4%
Net Income Growth (CAGR 2012-2015)
98% Increase in IV Tenants
from 2013-2014 driven by Port Activity
NAV(Net Asset Value)
39 SAR Per Share 2015
KAEC Financial Highlights
11.2BSAR
Market Cap
9.8% EBIT Growth (CAGR 2012-2015)
KAEC Expects
22,000
Residents by 2018
Haramain
High SpeedRail
Operating early 2016
EEC is an affiliate of Emaar Properties
30% ownership stake
17% Revenue Growth
(CAGR 2012-2015)
Q1 2015 Q4 2014 Q3 2015
EEC’s Financial Growth Quarterly Breakdown
Revenue Net Income Gross Profit
169
85
8.1
Q 4 2015
386
176 158
303
213
69
229
157
85
Presales and Revenue Segment Breakdown
for December 31,2015
RD 74%
IV 15%
Commercial 6%
Other Income 5%
% Breakdown of
Revenue December 2015
Total 1,023M SARs
*Other Income: Constitutes value added services, service charges, and income from education
1146
239
760
151 61 50
ResidentialDevelopment
Industrial Valley CommercialDevelopment
Other Income
PreSales Revenue
236
147
50
Q2 2015
(SARS M) Net Income of 302.7 M SAR for Fiscal Year 2015
Financial Residential
Development Industrial Valley Commercial
Revenue
EBITDA
Net Profit
760
151
427
104
436
102.2
61
1.042
-3.4
EEC’s Segment Breakdown YTD December 2015
GP 480
123 9.8
681
1,353
308
1,104 760
4,206
326 405 836
Vertical Land SOLLand
IV LandSales
PDCLand
TotalUnits
PJTD YTD
SALES BREAKDOWN – PJTD VS. YTD – DEC 2015
Number of Units (Full Value) Total Area (M2 ‘000)
188 1,706
122
8,598
11,609
22,223
80 459 1,028
Vertical Land SOL Land IV Land Sales PDC Land Total Area
Sales Value (SAR M)
1,092
2,506
425
2,334
760
7,117
369 777
0 239
1,385
Vertical Land SOL Land IV Land Sales PDC Land Total SV
Revenue (SAR M)
1,202
2,633
7 46 1
3,889
641 912
1,557
Vertical Land SOLLand
IV LandSales
PDCLand
TotalUnits
PJTD YTD
PJTD YTD
PJTD YTD
MAJOR DEVELOPMENTS - RESIDENTIAL MAP
Page 21 © King Abdullah Economic City 2015
Presales
GP
RE
Residential Development Game Changers
Strong presales growth at 79.95% CAGR from 2012-2014 driven by: • Competitive prices offering investment
upside • Good infrastructure relative to other
major cities regionally • Strong demand for affordable housing
in Saudi Arabia • Revenue Growth 45.36% CAGR • Growth in Vertical Development by
395% since 2013. • Growth in Land Development by 37%
CAGR since 2013. • Majority of Sales continues to come
from land sales with 67% of all sales coming from land
• In 2016 we will be offering 3 finished products which includes: Waha, Sharouq, and TG 1.3. Pending the drafting of off plan sale regulation a large volume of sales launches will follow.
• Beyond currently project list are in the process of master planning and creating feasibilities for an additional 36 projects.
Land
Vertical
369
Residential Development Sales and Lease Breakdown YTD December 2015
NLA
Gross Margin
82
777
399
77,385 SQM
459,445 SQM
25%
98%
(SARS)
Revenue
326
405
*36 months of installments for land and vertical with a down payment of 10% for land and 20% for vertical.
RESIDENTIAL PRESALES
Product statistics (2012-2015)
Bench Mark Analysis Jeddah vs. KAEC*
4,351 3,746 4,807
3,583 5,700
10,160
Affordable Housing Medium Income Housing High Income Housing
KAEC Jeddah
*Jeddah Real Estate Prices - Colliers International Market Study
Product 2012 2013 2014 2015
Vertical Net Order Intake SAR M 21 9 235 379
Units 12 6 146 729
Land Net Order Intake SAR M 167 673 643 770
Units 136 403 705 1,038
Totals Net Order Intake SAR M 188 682 878 1,149
Units 148 409 851 1,767
99%
98%
74%
99%
57%
100%
98%
100%
90%
84%
98%
1%
2%
26%
1%
43%
0%
2%
0%
10%
16%
2%
103
392
153
91
219
145
279
439
410
504
253
BC1
BC2
BC3
GC1
GC3
Al Talah 1.1
Al Talah 1.2
Al Talah 3
Al Talah 4
Al Talah 5
TH4
Total R
eleased U
nits
Residential Land Sales Summary
90%
60%
78%
18%
86%
28%
22%
47%
100%
92%
18%
74%
26%
14%
76%
11%
61%
61%
10%
40%
8%
6%
3%
10%
17%
53%
0%
8%
82%
26%
74%
606
388
116
116
192
192
116
76
5
12
147
179
144
Al Shurooq
Al Waha
Beach 1
Beach 2
Marina 1
Marina 2
Marina 4
Al Waha
BC1 Villa
GC1 Villa
GC2
Al Talah 1.3
Al Waha
Total R
eleased U
nits
Residential Vertical Sales Summary
RESIDENTIAL PRESALES SUMMARY YTD
% Presales % Unsold % Lease
CHART
32 36
109
77 77 79
84 87
142
108 109 111
135 137 174
138 140 143
187 188 206
167 170 174
Basic Colors
0 173 208
60 190 216
119 206 223
179 222 231
86 142 25
113 156 70
139 169 113
164 181 154
244 183 32
232 187 75
218 190 116
203 191 156
242 103 60
124 166 79
162 190 132
201 215 185
Sold 90%
Unsold 10%
%Sold Land Sales
Sold 55%
Unsold 45%
%Sold Vertical Development Sales
RESIDENTIAL DEVELOPMENT PROJECT BREAKDOWN YTD
Page 15
Al Shurooq Al Shurooq Affordable 606 834 135,064 4,489 Near Completion Launched 545 90%
Al Waha Waha Medium Income 388 .- 42,718 5,948 Near Completion Launched 233 60%
Coastal Towers BLS High Income TBD TBD TBD TBD TBD Not Planned NA NA
Beach 1 BLS High Income 116 .- 21,485 12,374 Complete Launched 91 78%
Beach 2 BLS High Income 116 .- 21,485 13,200 Complete Launched 21 18%
Marina 1 BLS High Income 192 .- 21,096 12,291 Complete Launched 166 86%
Marina 2 BLS High Income 192 .- 21,130 12,108 Complete Launched 54 28%
Marina 4 BLS High Income 116 .- 21,497 12,066 Complete Launched 25 22%
Al Waha Waha Medium Income 144 .- 34,565 4,735 In Progress Launched 37 26%
Al Waha Waha Medium Income 76 .- 6,597 8,364 In Progress Launched 36 47%
BC1 Villa Al Muroj High Income 5 .- 11,803 5,190 In Progress Launched 5 100%
GC1 Villa Al Muroj High Income 12 .- 67,225 4,995 In Progress Launched 11 92%
GC2 Al Muroj High Income 147 .- 105,000 5,375 In Progress Launched 27 18%
Al Talah 1.3 Al Talah Medium Income 179 .- 46,495 5,950 In Progress Launched 133 74%
Al Talah 3 villas Al Talah Medium Income TBD TBD TBD TBD TBD Not Planned NA NA
Al Talah 4 & 5 villas Al Talah Medium Income TBD TBD 7,567 4,988 TBD Not Planned NA NA
TH2 villas Al Muroj Medium Income TBD TBD 74,977 7,757 TBD Not Planned NA NA
Vertical Projects 2,289 503,640 7,989 1,384
BC1 Al Muroj High Income 103 .- 215,946 1,512 Complete Launched 102 99%
BC2 Al Muroj High Income 392 .- 452,744 2,023 In Progress Launched 383 98%
BC3 Al Muroj High Income 153 67 196,520 2,714 Complete Launched 113 74%
GC1 Al Muroj High Income 91 .- 82,947 1,250 Complete Launched 90 99%
GC3 Al Muroj High Income 219 16 182,514 1,616 In Progress Launched 124 57%
GC4 Al Muroj High Income .- .- 168,475 1,450 In Progress Not Planned NA NA
GC5 Al Muroj High Income .- .- 191,563 1,500 TBD Not Planned NA NA
GC6 Al Muroj High Income .- .- 134,397 1,400 TBD Not Planned NA NA
Al Talah 1.1 Al Talah Medium Income 145 .- 63,094 657 Near Completion Launched 145 100%
Al Talah 1.2 Al Talah Medium Income 279 .- 148,628 691 Near Completion Launched 273 98%
Al Talah 3 Al Talah Medium Income 439 253 357,784 940 Near Completion Launched 437 100%
Al Talah 4 Al Talah Medium Income 410 115 134,397 1,400 In Progress Launched 371 90%
Al Talah 5 Al Talah Medium Income 504 125 139,976 1,400 In Progress Launched 425 84%
TH3 Al Muroj High Income .- .- 116,494 1,450 TBD Not Planned NA NA
%Presales
Total
Unreleased
Units
Sellable Area Sale Price Per
SQMConstruction Progress Launch Date Presales Community District Target Income
Total
Released
Units
MAJOR DEVELOPMENTS – INDUSTRIAL VALLEY
Land Use GLA NLA IV IA 1,500,000 1,316,000
IV IB 2,100,000 1,816,200
IV Phase 2 22,000,000 17,855,000
IV Phase 3 7,000,000 6,101,000
IV Phase 4 6,440,000* 3,398,000
Bonded Zone 3,000,000* 2,514,000
Northern Parcel 5.400,000* 4,590,000
3% 5%
51% 16%
17%
8% IV IA
IV IB
IV Phase 2
IV Phase 3
IV Phase 4
Bonded Zone
%IV Breakdown
IV 3
IV 4
Northern Parcel
*Approximate Figures subject to change from final master planning
Phase IV IA
Phase IV IB
Phase IV 2
Phase IV 3 E&F
Industrial Valley
NLA
Industrial Valley Game Changers
• Reoccurring revenue represents roughly 50% of IV revenues from Industrial lease properties.
• 98% Growth in Tenants from 2013-2014 driven by increased Port Activity.
• IV has started re-defining its business strategy while looking into opportunities which may enhance the operating revenue such as BRZ, warehousing, etc.
• IV participated in 6 events including local, regional and international roadshows/exhibitions to continue feeding the pipeline of tenants.
• Three significant Sales Contracts executed for IV for fiscal year 2015 with Sunbulah, Al Futtaim, and Al Shumous Logistics Fund totaling 238M SAR in order intake.
• IV is planning the creation of an Islamic/Halal Food trade zone within KAEC
• 17 New Tenants for 2015 - 15 of which executed industrial lease agreements and 2 industrial sale agreements. For a total amount of land 324,577 and 485,971 respectively
• Current Lease is SAR 16-18 / sqm • Sale is SAR 585 / sqm
Sold
Leased
57%
85%
25%
Industrial Valley Sales and Lease Segment Breakdown YTD DEC 2015
1,316,000
1,862,000
7,500,000L and 7,100,000S
1,214,000
99%
99%
*Rent is collected 1 year in advance and prorated through out the year whereas, sales revenues are recognized immediately in the month of sale.
Phase IV 3 B
44% 900,000
Phase 2.4
4.2
0.5
3.6
Northern Parcel
4.6
BRZ
3.1
0.6
2.5
Phase 4
3.7
0.0
3.7
Phase 3A
2.1
0.1
2.0
Phase 3C & D
2.0
0.1
1.9
Phase 3B
0.9
0.0
0.6
Phase 3E & F
1.2
Phase 2.5
3.2
Phase 2.3
3.6
0.3
2.9
0.4
Phase 2.2
3.9
0.8
0.2
1.4
1.5
Phase 2.1
1.2
3.9
0.1
3.8
Phase 1B
1.9
0.1
0.7
1.1
Phase 1A
1.4
0.4
0.1
Reserved
Non-Leasable Areas
Inventory
Area Sold
Area Leased
Phases Launched Phases in Planning
Lease & Sales Summary
• All areas are in Msqm. • Non-leasable area includes Utilities, Wadis, Parks and Empty Spaces
in Millions
Industrial Valley- Year on Year Performance
Sales and Lease Revenue
286
219
105
238
-28.4%
52.1%
2016 {F} 2015 2014 2013
480
2012
Sales Revenue (YoY) Operating (YoY)
Product 2012 2013 2014 2015 2016
Budget
Sales Revenue 286 480 219 105 238
Product 2012 2013 2014 2015 2016
Budget
Operating Revenue 15 28 33 47 59
29.8%
+46.3%
2016 {F}
59
2015
47
2014
33
2013
28
2012
15
in Millions
Industrial Valley- Year on Year Performance
Order Intake and Price Trend
465
634
239
500
-19.9%
62.3%
2016 {F} 2015 2014 2013
1,055
2012
Order Intake (YoY) Sales Price (YoY)
Product 2012 2013 2014 2015 2016
Budget
Order Intake 465 1055 634 239 500
Product 2012 2013 2014 2015 2016
Budget
Sales Price (SR/sqm) 202 247 413 490.5 535
Lease Price (SR/sqm) 6 7 11 14 14.42
585545
445
0
50
100
150
200
250
300
350
400
450
500
550
600
2012 2013 2014 2015 2016
22%
48%
50%
300
200
1414
11
7
6
0
5
10
15
2012 2013 2014 2015 2016
32%
49%
25%
Lease Price (YoY)
FMCG
PHARMACEUTICALS
PLASTICS
CONSTRUCTION
LOGISTICS
AUTOMOTIVE
GENERAL
*
*
*
*
*
*
*
*
*
INDUSTRIAL VALLEY - EXISTING TENANTS
Over 110 global and local IV tenants are in KAEC with 34 tenants on the ground
Page 21 © King Abdullah Economic City 2015
Commercial Development
Page 22 © King Abdullah Economic City 2015
Bay Views Office Park Brief Description: • Bay View’s is located in the heart of the Bay La Sun district in close
proximity to the Bay La Sun Hotel & Marina and other waterfront residential developments. Currently this development is complete and will host 11, 500 Employees upon completion
Bay La Sun Hotel
• Premium 4-star Business & Leisure hotel
• 195 rooms and 6 suits
• 60.7% Average occupancy rate for 2015
• Operated by AlKhozama
• Awarded as Saudi Arabia’s Leading Destination Hotel 2014 Juman Park
Juman Park development is adjoining the Bay La Sun hotel with a private swimming pool and recreational facilities. • Juman Park and Promenade spans over 75,000 sqm • Located in the heart of the Bay La Sun District bordered by the
Bay La Sun Hotel & Marina on one side and Bay Views office park on the other side, all connected by the canal promenade.
• Project completion expected in Q4
EXISTING RETAIL TENANTS
Page 23 © King Abdullah Economic City 2015
Page 2 © King Abdullah Economic City 2015
Appendix
ECONOMIC CITIES AUTHORITY (ECA)
ONE REGULATOR PRIVILEGED
REGULATIONS
•Master plan Approval &
Permitting.
•Business Licensing
(commercial, industrial,
healthcare, educational etc.)
•Land Management System.
•100% foreign ownership for
companies & individuals
•Bonded Zone regulations
•No cap on employment visa’s
•First implementation of
mortgage law in KSA
EASE OF DOING
BUSINESS
•60x24x7 concept of service
provision for all government
services
•True one-stop-shop for
investors and residents
Page 25 © King Abdullah Economic City 2015
INCENTIVES FOR DOING BUSINESS IN KAEC
A) REGULATORY
• Full foreign ownership permitted for companies, plant, equipment, projects arid property
• Accelerated business registration and setup process
• 38 bilateral trade agreements with partners giving stronger foreign investor rights
• Double taxation agreements with key countries - Equal treatment for foreign and domestic investors
• No minimum paid-up capital (most industries)
• Flexibility of transferring/allocation of companies› shares between shareholders, in accordance with
regulations
• The ability of foreign investors to sponsor foreign employees
Page 26 © King Abdullah Economic City 2015
INCENTIVES FOR DOING BUSINESS IN KAEC
B) FISCAL
• 20% Corporate Tax Rate for foreign companies and unlimited loss carryover
• No VAT or GST, no land or property tax and no personal income tax
• Kingdom is ranked 3rd best tax environment globally
• Tax deductions for R&D investment and training expenditures as well special tax treatments for investing in
less developed regions within the Kingdom
• Full repatriation of profits
• Custom duty on imported manufacturing equipment and raw material if used for local manufacturing
• A one-time 15% tax credit for industrial projects carried forward for up to 10 years
• 50% tax credit on Saudi employees training costs and payroll for 10 years
Page 27 © King Abdullah Economic City 2015
INCENTIVES FOR DOING BUSINESS IN KAEC
C) FINANCIAL • Access to soft loans from Saudi Industrial Development Fund (SIDF), and Public Investment Fund (PIF)
• Human Resources Development Fund that provides aid and support for activities related to qualifying, training
and recruitment of Saudi labor. It also shares the cost of the training and employment of the trainees by
providing assistance up to 50% of the employee›s salary for a period of one to two years
• KACST and KAUST R&D endowments
• No fees for registration of real estate property
• Generous and optimal industrial locations in both public and private arena (Industrial Cities & Zones,
Economic Cities and Clusters)
• Access to regional and international financial programs and incubators, including: Arab Fund, Arab Monetary
Fund, Arab Trade Financing Program, Inter-Arab investment Guarantee Corporation, and Islamic Development
Bank
Page 28 © King Abdullah Economic City 2015
